Avalanche: The Most Overlooked Blockchain – An Interview

Bart Smith, CEO of Avalanche Treasury, discusses his perspective on why companies should leverage the Avalanche platform.

Bart Smith, previously an executive at Susquehanna, is leading Avalanche Treasury Co. through a $675 million SPAC merger. With a $200 million discounted AVAX stake from the Avalanche Foundation, the aim is to establish a billion-dollar ecosystem fund, optimizing investor access to the Avalanche blockchain.

In a conversation with crypto.news, Smith articulated his views on the optimal timing for blockchain adoption and why Avalanche stands out among smart contract platforms for enterprises.

crypto.news: Avalanche Treasury recently declared its SPAC merger. What was the motivation?

Bart Smith: My background is in asset management and trading; I founded an ETF firm focused on emerging markets, later sold to Columbia Funds. At Susquehanna, I managed the ETF and credit-trading divisions, overseeing digital assets from 2014 onward.

Initially, we invested in Bitcoin. During the 2017 ICO boom, we created one of the first crypto market-making desks on Wall Street. Regulatory challenges led us to establish Susquehanna Crypto in the Bahamas, with offices in London and Hong Kong.

The impetus for Avalanche Treasury was multifaceted, primarily driven by improved regulatory clarity. This pivotal change facilitates institutional adoption of blockchain to enhance operational efficiencies across sectors like gaming and finance.

Historically, we were significant investors in Avalanche’s (AVAX) latest funding round, alongside Dragonfly, a co-leader from approximately five years ago. My confidence in Avalanche has been longstanding, and the treasury concept evolved from pure investment to a platform for better crypto exposure.

Many institutions either cannot or prefer not to buy crypto on unregulated exchanges, seeking ETFs instead. I managed a large ETF group, which, while effective, faces liquidity constraints due to primary-market requirements.

A regulated, reliable product that undergoes SEC oversight can circumvent daily redemption pressures, providing greater strategic flexibility in capital deployment.

By investing directly in assets and applications across networks like Solana (SOL), Avalanche, and Ethereum (ETH), Avalanche Treasury can uniquely capture value for its shareholders.

I foresee a five- to ten-year super-cycle of blockchain adoption, and I strongly believe Avalanche is undervalued and ideally situated to capitalize on emerging opportunities.

CN: Can you illustrate the liquidity difference between publicly traded stocks and major crypto tokens?

BS: Liquidity varies based on geography and regulations. U.S. investors face challenges accessing markets like Binance or OKX, limiting their liquidity options.

As more digital-asset treasuries go public, some will struggle with trading volume. Simply listing on an exchange does not guarantee liquidity; active interest and market makers are crucial.

Liquidity is influenced by the treasury’s strategy and leadership. Successful projects attract attention and trading activity.

CN: Is there genuine institutional interest in Avalanche and Avalanche Treasury?

BS: Absolutely. Early interest is encouraging, as many feel they missed the Bitcoin and Ethereum opportunities. While Bitcoin is seen as digital gold, it lacks comprehensive enterprise applications.

Avalanche emerges as an inclusive platform for businesses to integrate blockchain tailored to their needs while staying connected to the broader ecosystem.

With increased regulatory clarity, firms can safely implement blockchain solutions, avoiding public blockchains’ data privacy issues. Alternatives like L2s on Ethereum involve complexities fewer businesses can manage.

Avalanche enables the creation of custom L1s with direct support from Ava Labs, leading to meaningful collaborations and tailored infrastructures.

CN: How is Avalanche’s approach distinct regarding businesses building their networks?

BS: Avalanche consists of three chains: P-Chain, C-Chain, and X-Chain. The C-Chain facilitates building L1s—essentially subnets that enhance customization while remaining integrated into the Avalance ecosystem.

This creates a virtually limitless liquidity loop since transactions are independent from others. Businesses maintain control through their native tokens, with security ensured via Avalanche’s validators.

This setup simplifies enterprise utilization compared to complicated L2s on Ethereum, providing a secure, end-to-end solution.

CN: Can you provide examples of how this model is being utilized?

One example is Wyoming’s initiative to issue a stablecoin on Avalanche for distributing state benefits via a secure debit system. This enables privacy without exposing personal data on a public ledger while retaining blockchain efficiencies.

California’s DMV has also tokenized millions of vehicle titles, streamlining processes by allowing real-time verification of clean titles on a blockchain. Such systems could significantly improve overall transaction efficiency.

The involvement of other automakers could amplify this efficiency, reflecting the network effect and demonstrating how private chains remain connected to the public Avalanche network.

As usage increases, the scarcity of AVAX is bolstered through transaction volumes, further enhancing the token’s value.

How does Avalanche manage value flow to the primary chain?

BS: Not all value from private chains will directly benefit AVAX holders, as companies prioritize their financial frameworks. However, all transactions are integrated with the Avalanche network, with fees paid in AVAX, reinforcing the token’s economic model.

This transition represents a shift from speculative enthusiasm toward practical adoption by businesses and governments, something that hasn’t been fully appreciated yet.

CN: After the $200 million AVAX purchase from the Foundation, will you pursue similar transactions or market purchases?

BS: Institutional demand for this transaction is strong. They seek structured blockchain investment opportunities, which were previously missing.

The immediate goal is to finalize this transaction, ensuring compliance and operations launch smoothly in early next year. Post-listing, institutions have shown eagerness to invest through various equity instruments.

CN: What are the possible market impacts of building a billion-dollar AVAX treasury?

BS: Yes, acquiring significant volumes could affect prices. We are cognizant of liquidity dynamics and are committed to a long-term, systematic acquisition strategy.

CN: What is being overlooked by investors regarding AVAX or the broader market?

BS: Market focus remains heavily on central bank policies, affecting perceived asset valuations. However, significant advancements are occurring on certain platforms that deserve recognition.

I believe that by 2026, institutions will begin scrutinizing blockchains on their merits, which may benefit Avalanche as its advantages become more apparent.

Growing adoption and emerging use cases will prompt deeper analysis of networks, positively influencing Avalanche’s market position.